If a Firm Has a 2 Million Shares Outstanding and Its

question 93

Multiple Choice

If a firm has a 2 million shares outstanding and its stock trades at $25 per share, the company also has $10,000,000 in debt. The company's market capitalization is

• A) $40,000,000.
• B) $49,000,000.
• C) $50,000,000.
• D) $60,000,000.

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Definitions:

Bilateral Contract

A contractual agreement involving two parties where each promises to perform an act in exchange for the other's act.

Past Consideration

Refers to an act or benefit given in the past that cannot be legally considered as an inducement for a contract.

Illusory Promise

A statement that appears to be a promise but is too vague or lacks the requisite commitment to be legally enforceable as a contract.

Promissory Estoppel

A legal principle that prevents a promisor from arguing that an underlying promise offered should not be legally upheld if the promisee has relied on that promise to their detriment.